Customs pays up for IT bungle

The Australian Customs Service will shell out just under AU$500,000 in compensation claims from the botched introduction of a new IT system late last year, with more than AU$8 million worth of other claims hanging in the balance.In October, Customs' Integrated Cargo System (ICS) went live, replacing an existing solution that had been serving users such as freight forwarders, importers and customs brokers for more than 20 years.

The Australian Customs Service will shell out just under AU$500,000 in compensation claims from the botched introduction of a new IT system late last year, with more than AU$8 million worth of other claims hanging in the balance.

In October, Customs' Integrated Cargo System (ICS) went live, replacing an existing solution that had been serving users such as freight forwarders, importers and customs brokers for more than 20 years. But problems with ICS caused backlogs of cargo at some ports.

Customs chief executive officer Michael Carmody said in a statement today the agency accepted ICS had contributed to delays in clearing cargo, particularly shipping containers at seaports in Sydney, Brisbane and Melbourne.

"Customs has therefore decided to meet storage and transport-related costs where these were the result of a problem with the implementation of ICS that was attributable to Customs," Carmody said.

In total, Customs has so far reviewed 320 out of 433 claims.

"Of the cases reviewed, we have agreed to offer compensation in full to 196 claimants and part-compensation to 72 claimants. These amounts total AU$492,000," said Carmody.

Customs has rejected 52 claims out of the remaining 113, but claimants could still provide more information to further their case.

However, the more pressing issue for Customs is a small number of large, more complex claims yet to be reviewed, totalling AU$8.4 million.

"These require detailed review and discussions with these claimants," said Carmody.

Staff-related costs such as overtime, filed by importers, haven't been finalised due to the changed government regulations in the area. "This is because it is normal for costs to be incurred in the implementation of new regulatory requirements," the Customs chief said.

"Claimants will have to demonstrate that the particular costs claimed are directly attributable to a problem with the ICS and above what could normally be expected."